Regarding the N.O.I amount, how much taxes will it be reduce for this spends? 180k gross income and 75k spends, repair, maintenance. Cash flow 108k, I wonder how much the owner has to pay for taxes or may be getting tax refund?
Glad it was helpful! I have a free deal evaluator that we use everyday to look at and make offers on deals. You can download it here: alpinecre.com/evaluatorgiveaway/
Gotta get resourceful! Easiest places to start looking is Crexi, Loopnet, mobilehomeparkstore, broker's websites, craigslist, maybe even facebook marketplace!
Very helpful! Any tips on how I should calculate value if there a number of vacant lots that are ready to rent? Not sure how that plays into a potential purchase price. Thanks!
Simon, as far as I am concerned if a lot is not producing income, then no value should be attributed to it. If there is a vacant park owned or single family home, then only the building of shell value should be applied to your evaluation (Don't apply a cap rate to those numbers).
@@simoncox6722 Lets say the 11 homes are renting for $800. $400 lot rent, $400 home rent. 11 x $400 = $4400 $4,400 x 12 Months = $52,800 gross annual Lot rent $52,800 Divided by (arbitrary) 50% expense ratio = $26,400 NOI. 26,400 NOI with 8% cap rate applied = $330,000 value on those lot rents. Now we add the POH values. say $10k each home. 330,000+110,000= $440,000 Purchase price at an 8 cap. We don't want to apply a cap rate to the POH rents because it would have overstated the value of those homes by $220K. Because mobile homes don't appreciate like houses or apartments we have to separate lot and home income
@@NolanFreeland So are you saying that for the POHs rented for about $800, I can use a part of that as "lot rent" even if it's not technically lot rent? That's what I'm confused about. The lots are technically occupied but the occupants are renting the home, not the lot. Other lots in the park are rented for $325, can I count all the POHs that are rented as occupied lots and use the $325 portion in calculations?
@@simoncox6722 Short answer, Yes. Usually on larger parks, you'll have a mix of TOH and POH, and that will give you an idea of how much to quantify as Lot rent. If there is all POHs, you'll want to know what market lot rents are, and maybe depending on where you are with price, run your analysis with some lot rents below market.
Basically, it's a multiple on the income the property produces. An easy way to think about it it, if you paid cash for the property, the cap rate you purchase at would be your annual return.
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